Term life insurance and Indexed Universal Life (IUL) are two different types of life insurance policies. Term life insurance is a temporary policy that provides coverage for a specific period of time, usually between 10 and 30 years. If the policyholder dies during the term, the beneficiaries receive a death benefit payout.
Once the term ends, the policy expires, and the policyholder is no longer covered. Term life insurance is generally more affordable than permanent life insurance policies like IUL.
On the other hand, IUL is a type of permanent life insurance policy that provides coverage for the policyholder's entire life. It also has a cash value component that builds up over time on a tax-deferred basis.
Policyholders can access the cash value through a policy loan and use the money for other expenses. IUL policies are more expensive than term life insurance policies, but they offer more flexibility and long-term benefits.
In summary, term life insurance is a good option for those who need coverage for a specific period of time, while IUL is a better choice for those who want lifelong coverage and a savings component.
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Source: Conversation with Bing, 11/14/2023
(1) Term vs. Universal Life Insurance: What's the Difference? - Investopedia. https://www.investopedia.com/ask/answers/205.asp.
(2) Indexed Universal Life Insurance (IUL): How It Works. https://www.nerdwallet.com/article/insurance/indexed-universal-life-insurance.
(3) Term vs Universal Life Insurance: Which is Right For You? - Assurance IQ. https://assurance.com/life-insurance/term-vs-universal-life-insurance/.
(4) Term Life Insurance vs IUL - InsuranceQuotes2Day. https://insurancequotes2day.com/blog/indexed-universal-life-vs-buy-term-and-invest-the-rest/.
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